A 4.7% annual yield on a five-year certificate of deposit sounds tempting, doesn’t it? Especially since most five-year CDs pay less than 3.6%.

Don’t be tempted. These high-yield CDs often are just marketing ploys to lure you into buying high-0commission financial products, according to the Financial Industry Regulatory Authority (Finra), which has fielded dozens of inquiries and complaints about these bait-and-switch tactics in the past year. 

How the ploy works: Ads in local newspapers promote CDs with yields as much as one-third higher than the best-prevailing rates. To qualify for the high-yield CD, however, you’re required to go in person to a designated office, where a salesperson aggressively pitches different—and often less liquid and potentially more risky—investments such as equity-indexed annuities, which link your returns in part to stock market performance. These are riskier than CDs, hard to understand and often have costly fees. And in fact, the firms that take out the ads don’t even offer high-yield CDs. 

If you insist on getting the CD that was advertised, the firm claims that it was offered for a short promotional period that has already expired. Or in some cases, the firm will send you to a local bank to buy a lower-yielding CD, then pay you a cash bonus that covers the difference between what you were promised and what the bank CD yields. 

What to do: If you want a CD, be sure to get it from a reputable bank or credit union where it is insured by the FDIC or NCUA. You can ­compare rates at ­DepositAccounts.com or Bankrate.com.

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